Monday, 15 December 2008

Generally speaking, people are incorrigible and they cannot resist the temptation of easy and quick money. That is the weakness on which many fraudulent companies rely on to make fast buck.

When some people enquired about the Duck Development Society at Gadval, Mahaboobnagar district, I told them not to fall prey to the false propaganda of that society with easy and quick money. Still, not only they have joined in the scheme but also made others join it. Now, when police started enquiries into the scam, they want to know whether police filed a case against that company. Their worry is about the police case not about the genuineness of scheme and the fraudulent Society. If there is no police case against the Society they would continue to join more people into the scheme.

Their attitude to reap the benefits before the company closes shop, is disgusting. They sure know that it is a fraudulent Society and soon it would close shop. Still, they want to be the first to get the benefits and they do not care if the people who joined later lost money or not.

The other day, a worried man from Gadval called me to find out whether there is a police case against the company. I patiently told him that it is a fraudulent society and the question is not the police case but people losing money.

The Society is promising to repay Rs. 36,000 in 42 days if they paid Rs. 20,000. There is no business on earth which gives that amount of returns. There is no justifiication for the offer.

When the police enquired about the scam, I told the Gadval CI Mr Kiran Kumar that if the business is that lucrative they could approach some commercial bank with the project report and the Banks would be happy to extend loan facility to the society. Still, the Soceity prefers to mobilise funds from public which is prohibited under law. No person under whatever pretext is entitled to mobilise funds from public and this is the established law in India.

Let us hope people would realise this and keep themselves off from these fraudulent companies.

Friday, 12 December 2008

Andhra Pradesh State Government filed a common counter against the writ petition filed by Amway India Enterprises in the Hon'ble High Court of Andhra Pradesh questioning the legality of its continuance of the illegal business once the High Court of Andhra Pradesh pronounced that its schemes squarely attracted the provisions of Prize Chits & Money Circulation Schemes (Banning) Act, 1978.

The common counter can be described as brilliantly drafted document and it hit the nail on the head.

It is like the axim in Hindi, ulta chor kotwal ko daunte. The Amway is indulging in the illegal money circulation scheme and questioning the State government of its acts which were acted upon keeping in view the larger interests of people. It is high time that all the activities of the Amway are closed and it is thrown out of the country. Its illgotten wealth should be confiscated.

What here we have to understand is whether a criminal can continue the crime because of the fact that the criminal case is still pending in a court of law.

The illegal modus operandi of the Amway is exposed and it is high time the officials swiftly acted and closed the business of the company and its godowns seized.

Wednesday, 10 December 2008

Of late, ducks have become a big menace for the denizens of Gadval in Mahaboobnagar district. Do not wonder about how ducks became menace. Actually it is not ducks but a society is inducing people to part with their money by offering them ducks.

Let us get into the story how the gullible are being lured into the scam.

Duck Development Society, a Prakasam district-based organisation, is offering training in duck rearing which it claims is very profitable business and those who want to become members to get trained in duck rearing have to pay Rs. 5,000 as membership. The society would impart training in duck rearing. Earlier, it was only Rs. 3000 since there has been scrambling from people the membership fee has risen to Rs. 5000.

Simultaneously there is another offer from the Society. If the members pay Rs. 20,000, after 42 days they would be repaid with Rs. 36,000. After hearing my radio speech, a person from Gadval called me and enquired about the viability of the scheme. He was told not to fall prey to the machinations of the new scheme since there is no business on earh that would fetch Rs. 16,000 profit in one and a half month period. He was not convinced. I tried to reason with him in vain.

I tried to talk to the superintendent of police of Mahaboobnagar district who said that the DSP of Gadval has been entrusted with the enquiry of duck society. I contacted the DSP and he was busy and told me that he would talk to me later. He never spoke to me again.

After a month, Gadval Circle Inspector Kiran Kumar called me and asked to speak to the legal representative of duck society. I told them that the society is indulging in illegal money circulation scheme and they have no business to mobilise money from public be it in the shape of deposits or membership fee. After a lengthy argument, the legal representative offered me to visit Gadval to get explanation in detail. However, he developed cold feet immediately and on some excuse he left for Hyderabad promising that he would return soon.

Now, the police are busy in preparing arrangements for Tungabhadra pushkaram and after December 22 only they could spare some time to get into the duck menace.

You know what will happen meanwhile. The society would amass several crores of rupees and buy property with that money in somebody else's name. The members would be in an eternal waiting mode to get back their money. That is what exactly happened in Peeshonu case of Suryapet, Nalgonda district.

How do they pay Rs. 36,000 in 42 days for a mere investment of Rs. 20,000. That is the catch. The society would repay some members to instill confidence in others from the money collected from the new members. Later, the chain would come to end at some point or other.

Monday, 24 November 2008

The Machavaram police has finally registered a case against the giant insurance firm Bajaj Allianz Life Insurance Company Ltd and Team Life Care Insurance (Pvt) ltd after toying with the court order for a week.

It may be recalled that the Honourable First Additional Chief Metropolitan Magistrate issued orders on 18-11-2008 taking cognisance of the offences by Bajaj Allianz and Team Life Care for their alleged involvement in money circulation scheme in the name of product sales.

While the companies like Amway, Herbalife and a score of others also indulged in money circulation schemes in the name of sale of products, the insurance company and its crony have been into the same offence in the name of sale of insurance policies. Still, the officials of the fraudulent companies defend that theirs is a legal business. Still, they fail to produce any supporting document to that effect. Moreover, they argue that they would permission soon for approval of multilevel marketing system in selling their insurance policies. How ridiculous is their argument. Anyway, we must congratulate them for their honesty for confessing that at present their business is illegal.

The officials and their counsels tried to influence the complainant with compensation appealing him to withdraw the complaint. They could not answer why they are appealing for withdrawal if they think their business legal.
These people know very well that they are into an illegitimate business cheating the gullible people with inducement of easy and quick money and they know very well alrealdy several lakhs of people were cheated in the scheme. Still, they want to continue the illegal business.
It is high time stringent action is initiated against such frauduelnt companies.

Thursday, 20 November 2008

A criminal complaint was filed against the Bajaj Allianz and its corporate agent, Team Life Care Insurance (P) Ltd in the first additional chief metropolitan magistrate court in Vijayawada. After hearing lengthy argument put forward by advocate and activist M V Shyam Sundar, the Court referred the case to the Machavaram police for thorough investigation.

If one dwells into the details of the complaint, the advocate was approached by a victim who lost almost all his money after he purchased a life insurance policy from an unauthorised agent of Team Life Care Insurance Pvt Ltd. The victim purchased three policies each worth Rs. 5,000 and in turn he got units worth Rs. 1500 for each policy. He was taken aback after looking at the summary statement and approached the agent but did not a satisfactory reply.

After listening to a FM radio speech by Advocate Shyam Sundar, the victim approached him and the advocate suggested to file a criminal complaint against both the companies.

Both the companies indulged in all types of violations while selling insurance policies. No policy should charge more than 40 per cent as charges from the policy amount as per the Insurance Act, 1938. But in this case 70 per cent has gone as premium charges. As per the Section 41 of Insurance Act, 1938, no agent whether Individual or corporate agent should employ sub-agents to sell insurance polices. With the connivance of Bajaj Allianz, the Team Life Care Insurance is indulging in such malpractices.

In depth study shows, actually, the Team Life Care is indulging in more serious crime that is money circulation scheme. It is encouraging the unauthorised sub-agents to enroll two more members each offering commissions. They in turn have to enroll to more members each. This is nothing but money circulation schemes as envisaged in the Honourable High Court of Andhra Pradesh judgement in Amway case.

One has to wait and watch to see what the police are going to do with this criminal case. If history repeats, it will be another GoldQuest case.

Thursday, 13 November 2008

The senior superintendent of police of the crime branch CID of Sikkim State police department issued a public alert notice warning the people against joining in the nefarious activities of Amway India Enterprises Ltd which is brazenly involved in the money circulation scheme in the guise of product sales. Here is the full text of the notice for public consumption.

R.O. NO. 735/IPR/PUB/07-08 (I) Dt. 4/2/08.

Crime Branch
State Police Headquarter Department
Gangtok

NOTICE

It is notified for the information of the public in general that the Amway India Enterprises started their business operation in India in May, 1998. It deals with various consumer goods like tooth paste, soaps and other products like Nutralites etc. These products are camouflaged to cover up their money circulation schemes. This company is into the recruitment of members and the sale of products is only incidental to the main activity of recruitment and payment of commission. Through a promise of quick and easy money this company has succeeded in duping the gullible public in India. The activities of this company are akin to money circulation schemes, which in India are expressly banned under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
In the year 2006, a case was registered against Amway and its distributors by CID/Andhra Pradesh on a specific complaint on 24/09/06 vide Crl. Case No. 10/2006 U/S 385/420 IPC and Section 4, 5 & 6 of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.
The Division Bench of High Court of Andhra Pradesh vide order dated 19/07/2007, delivered a landmark and path breaking judgment holding that the scheme of Amway India Enterprises is nothing but money circulation scheme. Later, Amway challenged the High Court order through Special Leave Petition in the Apex Court of India, which was dismissed on 14/08/2007 by the Supreme Court.
As discovered by CID, E.O.W. Andhra Pradesh Amway India Enterprises is a founder member of Indian direct selling association (IDSA) which is an association of different companies having similar modus operandi purportedly multilevel marketing just as the Amway Scheme. All these companies viz. Avon Beauty Products, Tupperware, Modicare, Oriflame India etc. including Amway India Enterprises are carrying on the business thereby violating the provision of Section 2(C) of Prize Chits and Money Circulation Scheme (Banning) Act, 1978. This view was endorsed by the Apex Court in dismissing against Amway special leave petition.
Thus, the business being carried out and carried on by the above companies by misleading/misguiding the innocent people have appeared to be illegal in the eyes of the law of the land and hence adequate publicity is given to the public in General for their awareness.

Monday, 10 November 2008

Gamana, NGO from Suryapet, Nalgonda district responded to our article on Peeshonu. Thank you. Mr Radhakrishna of Gamana lamented that it is very difficult to find a victim and is equally difficult to convince the victim to lodge a complaint with the police. That is our weak point and the fraudsters forte.

We public spirited persons should join hands to fight these maladies. We have to search and find victims and somehow convince them to file a complaint with the police.

These fraudulent companies convince the members to bring in their relatives, friends and even their own family members into the scheme. The crooks' strategy is they never lodge a complaint against their relatives, friends and family members even if they lost money in the scheme. But what we should not forget is that this strategy is destroying the fragile social fabric of our society. People who lost their hard-earned money in the schemes never forgive their relatives, friends and family members and they would never trust them in future.

My dear friend Radhakrishna, do not get disheartened. The future is ours and we will win the game against these fraudsters. We can approach the court under section 190 and 200 of CrPC to file complaints against these fraudulent companies and bring the fraudsters to book.

Keep watching this blog regularly to share views and get new spirits everyday. Better to go through the older posts to get more information and become proactive with increased enthusiasm. Keep smiling and get organised. Keep in touch.

Tuesday, 4 November 2008

A racketeer in Gadval town in Mahaboobnagar district launched a money circulation scheme and unauthorised deposit mobilisation. This is a classic case of introducing new product altogether. The fraudster started a company in the name of Duck Development Society. The idea is to purchase ducklings, rear them and sell its meat to the customers. The dubious novelty of the plan, the Society is purchasing ducklings with the money of public inducing them with huge returns within a short span. This is openly flouting the rules of Reserve Bank of India to mobilise deposits and inducing the public with quick and easy money. And the members who introduced more members are offered Rs. 300 per membership.

This type of inducement squarely falls within the description of easy and quick money and attracts the provisions of Prize Chits & Money Circulation Schemes (Banning) Act, 1978.

The recent judgement of the Supreme Court categorically stated that offering easy and quick money is illegal and comes under the mischief of the above Act.

Let us look at the modusoperandi of the new fraudster. Every member has to register his name with the society by paying Rs. 3,000 (Now it has gone up to Rs. 5,000). After registration, each member has to pay Rs. 20,000 to enable the society to purchase 500 ducklings at the rate of Rs. 24 each. And now the Society rears the ducklings with the rest of the Rs. 8,000. After ducklings grew and become ducks, its meat would be sold to the bulk customers at the rate of Rs. 500 per kg. Any clue, who would purchase duck meat for Rs. 500 per kg. That is the bait.

Now there is a big queue before the office of the society to become members.

It is said that the Society had already collected money from 5,000 members. Reports said that a farmer sold his property and paid Rs. 40 lakh to the society to become billionaire overnight.

Before people and the police realised what happened the organisers of the society would become billionaire and may vanish too.

Some youth who smelled rat with the scheme contacted this blogger and informed about the racket. They said that they had approached the police but they did not entertain their complaint.

Police have yet to detect the racket behind this big fraud. What is funny is that they have yet to identify the purchaser who buys duck meat for Rs. 500 per kg.

Sunday, 2 November 2008

The Medak police, headed by Mr Siddhaiah, its Deputy Superintendent of Police, busted a money circulation scheme and arrested one P Saidulu, who had already amassed several crores of rupees. They had seized Rs. 2.9 crore from their possession.

The modus operandi of these fraudsters is similar to that of any previous crooks. Peculiarly the accused named the company after a Biblical river Peeshonu. It is thus named propably to showcase that the organisers are very regligious people.

The Peeshonu, which started selling products of various hues soon turned it into an open money circulation scheme. Like Amway, Saidulu also started selling products which is the camouflage for their money circulation scheme. Soon Peeshonu was converted into an open money circulation scheme in which they collected Rs. 1000 with the promise of repaying Rs. 4000 in 20 months. People thronged their office and stood in long queues to pay the amount. It is believed that the organisers of Peeshonu collected several crores of rupees.

Police faced the perennial problem of finding a victim to lodge a criminal complaint with the company. Had the police known that the Prize Chits and Money Circulation Schemes (Banning) Act, 1978, conferred upon them a right to raid such premises even on a mere suspicion, they would have gone proactive well before.

Anyway, better late than never. The police have busted the money circulation scheme and arrested the organisers. They had also seized Rs. 2.9 crore from the possession of Saidulu.

Let us hope Police officials of other areas and all over the country became proactive and acted upon these fraudulent schemes.

Sunday, 26 October 2008

Fraudsters always come up with new schemes and new mode of cheating. I have already stated this many a time. And the Supreme Court judgement in criminal appeals No 1044, No. 1045, and No 1046 of 2008 delivered on July 10, 2008, proved this once again. The Supreme Court has clearly stated in the judgement that whatever the scheme if there is quick and easy money and it is depended on future enrollment of members, it is a clear case of money circulation scheme.

In the first appeal, the accused promoted a scheme in which a member has to pay Rs. 625 and after the enrollment of 14 more members he is eligible for repayment of Rs. 1250. The accused has already collected Rs. 500 crore. The prosecution described the scheme as 'mathematical impossibility'. The Supreme Court upholding the High Court judgement stated that it is a money circulation scheme and liable for punishment.

In the second and third appeals, the member has to pay Rs. 625 and the scheme promoter would purchase lottery tickets in his name worth Rs. 350 fir 35 weeks at the rate of Rs. 10 each. If the member wins the lottery the amount would be given to him. The rest of the Rs. 275 would be used for the subscription of a magazine. After 35 weeks, the member would be returned Rs. 1250. In this case also, the promoters collected Rs. 500 crore. The Supreme Court held that the scheme is so grossly unworkable and the promoters made unworkable false representations. But inevitaly and inescapably later subscriers are ound to suffer unjust loss when they swallow the false promises and make payments and it attracts the mischief of Prize Chits & Money Circulation Schemes (Banning) Act, 1978. The Supreme Court also held that it is also a clear case of cheating under Section 420 and 34 of IPC.

The Supreme Court judgment is lauded as it is a trend setting and the same would be applied to the other companies like Amway, Herbalife and others. It is high time people realised the danger of dubious schemes and not to fall prey such schemes.

Saturday, 25 October 2008

For the last one decade, many fraudulent companies have been wreaking havoc on our economy by siphoning out of our country several thousands of crores of rupees every year. They not only loot our money but also out to destroy the social fabric of our society. They started multilevel marketing system in the country but actually indulging in money circulation schemes in the guise of selling products and services. We must avoid joining these fraudulent schemes and efforts should be made to remove the veil of products sales and services to identify the real mal-intention of these rogue companies.
There are umpteen numbers of companies operating on these lines all over the country and many have intruded at the local level looting the common man with inducement of get quick rich. These fraudulent companies introduce various products with the dubious claims of high quality and equally dubious claims of direct selling. There is neither high quality nor direct selling but only money circulation scheme.
People who are unto these schemes lose money ultimately and end up in strained relations with their friends and relatives. Just a quick glance around will reveal how many companies are plundering people’s money and lining their pockets. Beware of these dubious companies which offer easy and quick money, early retirement, deluxe house, luxurious life and travel abroad.
Kindly remember, there is nothing like free lunch. One has to work hard to earn it and save it judiciously. Then only anyone can become rich over the years. These fraudulent companies are becoming rich through such schemes and ninety per cent of people who joined these companies end up losing their hard-earned money.
Notwithstanding the monetary loss to our countrymen who joined these money circulation schemes, there is bigger trauma people face after strained relations with their friends, relatives and family members. Out of compulsion they might join some money circulation scheme or other. But later, they would never trust the person who forced them to join the scheme. Will they ever trust the friend who caused him monetary loss, mental pressure and physical torture in future? This is the biggest threat the country is facing today.
In order to hoodwink the provisions of Prize Chits & Money Circulation Schemes (Banning) Act, 1978, these companies took this strategy of product sales and services. The mother of all scams is Amway which started its operations way back in 1998, entering into the country with the promise of foreign direct investment. However, it has been siphoning out several hundreds of crores of rupees every year. The ex-factory price of all the products of Amway is very low and the selling price is very high. For instance, the ex-factory price of Glister toothpaste is Rs. 16 and the selling price is Rs. 120. Who is pocketing the extra amount and who is paying taxes on this amount? This is how they are cheating not only people but also the government.
There are a number of companies which indulge in such activities. It is pertinent here to name some of them. Amway, Herbalife, Tupperware, Hindustan Lever Network, Modicare are only a few of them. Another company, GoldQuest International, which has been in existent in over 68 countries, is now closed in India thanks to the number of criminal complaints filed against the company.

Monday, 20 October 2008

It is really odd that some fraudsters are brazen enough to complain that they lose their livelihood if these fraudulent companies are closed down because they are indulging in multilevel marketing. It is pertinent to note that they are into the fraudulent activities affecting the economy of our country and destroying the social fabric of our society and they are still adamant enough to claim that what they are doing is for their livelihood only.

What more funny is that they argue that there are bigger crimes in the country like corruption, large size land encroachment scandals and why we are focusing on simple things like money circulation schemes.

It is like let the pickpockets, petty thieves, house burglars go unchecked as they are minor criminals. Shall we leave these people and concentrate on corrupt politicians and bureaucrats? There are people, media and the law enforcing agencies who concentrate on those crimes. The money circulation scheme crimes are spreading like water under the carpet and it is high time all right-thinking people joined hands to stop this menace.

With or without our knowledge, several hundreds of crores of rupees is being siphoned out of the country every year and only some people are getting unjustly enriched. Shall we allow this to continue without check or hindrance?

Funnily, they also claim that there is no other go for them except to commit suicide if they are out of work from these money circulation schemes. They never agree to the fact that they were induced into becoming overnight rich and are in turn trying to induce others.

The problem is all these crooks are highly educated and they care two hoots for the society, the economy and even the welfare of the country.

Sunday, 12 October 2008

Many people believe. rather wrongly, that the scheme of a particular company is not illegal because they are multilevel marketing only and not money circulation schemes. They should learn that if any company indulges in any quick/easy money schemes, it is certainly indulging in illegal money circulation schemes.

For the simple reason, that there are no cases against any company or no complaints from any quarter does not absolve the company from its guilty operations.

For instance, GoldQuest International claimed for long that its operations are transparent and every transaction is through demand drafts and everything is computerised. Once criminal cases were filed against the company, everything came down like a pack of cards. Now, every person who participated in the scheme of GoldQuest is running for cover and became fugitive. They can plead their arguments in any court of law instead of running away from it.

Why many companies choose multilevel marketing is that the companies can attract more people with inducement of easy/quick money. And naturally, people who joined early may make some money in the initial stages and everyone end up losing money. The inducement and the hook is so attractive that the people would be in an illusion that they are the first to join the scheme and they would make money fast. They would be disillusioned soon but prefer not to complain for obvious reasons: 1) they were introduced by their relatives or friends and they do not want to lose their relationship 2) they resign to their fate for not making money and curse their fate. They never realise that the scheme is inherently flawed and everyone except the company would lose eventually.

For instance, MyVideoTalk members claim that there is no membership fee. But the membership fee included in the money they have paid. The company may claim that their product's worth is actually Rs. 3 lakh and they are selling it for Rs. 8800. Why should any company sell the product that expensive for pittance? The secret is in the hook and the inducement it offers to the members.

People easily fall for easy and quick money and that is their weakness and that is the forte of these fraudulent companies. Since it is not easy to bring awareness among people about these fraudulent schemes, it is apt to file criminal complaints against these fraudulent companies.

Saturday, 11 October 2008

Here is the bitter experience of a person who refused to part with his identity. He wanted to share his tryst with Amway scheme in which he experienced agony and mental torture. I am presenting his article as it is to present his views only.

Shyam Sundar

I appreciate your initiative very much. Here is my story. I am from Bangalore, India and I am working in an MNC as an engineer. I joined Amway in 2006, June and did every thing my upline instructed me to do for 2 months. But as I felt it actually was not very transparent one and indeed deviated a lot from the promises it actually makes during my upline recruited me, I left it immediately.
I will first share my experience and opinions regarding the promises you pointed out it generally makes during it introduces the “business” to a new person or prospect.
1. “You can earn a fortune in 12-15 hours a week. “ ………….Yes they told me the same when I was introduced to the business. Later I found out that its much more than that. Infact its like 2 to 5 hours everyday ! We were instructed to go for contacting for 30 min to 1 hour/day ... then making phone calls etc., for 30 mins/day … then showing the plan will take 1 to 2 hour/day and then almost every day there will be a meeting and stuff also it almost took 3 to 4 hours daily … still I have not taken traveling time into consideration. And on weekends (Saturday and Sunday it takes 10 hours in meeting contacting plan showing etc. etc. etc…… so per week it’s like 50 hours of work!!!
2. This business has created thousands of millionaires …. Yes they say it every time.
3. Little or no selling … just buy from yourself ……. Yes they say that it's not door to door selling but what I found out was shocking. In India they instruct to follow 9 “core” (fatal) steps to follow in order to be successful in the business. And every time they asks their downline whether they are following the steps properly or not. If you don’t follow all the steps they will make you feel guilty about it (by some sort of emotional pressure…. like upline will not help you much.. even some times my upline expressed his disgust about one of my crossline for he not following the steps) …. So one is emotionally or mentally forced to do it. And one such steps says “doing your personal 100 PV every month ….. you can do it by buying the products for you or retail it to outside “… Here “ personal means it can’t include your group volume. In India 100 PV means Rs 5000/- (almost US $120) since nobody uses the products worth Rs 5000/- every month one is forced to retail … almost like door to door selling. If the upline continuously tells you that you can’t succeed without doing personal 100 PV your mentally forced to do it … This particulars they deliberately hide during recruiting a new prospect and if I knew this fact earlier I would have never joined this business.
4. You can save at least 30% off your own shopping bill…. Yes they say that
5. Did anyone in the group you sponsored make a net income of one dollar after expenses? Did you make a profit? If not, how much do you think it cost you (approximately) ? ……………. Well I never make any profit.
6. You need to use 100% of the product in “your own business” regardless of cost…………………. Yes they strongly say that. Infact they say if you don’t do this you will never be successful. Although every time they use the word “recommend” again it’s almost like an emotional pressure to do so.
7. Did you find the products to be cheaper or more expensive than any thing at the store? How has this impacted you personally? Yes they are very much expensive. Although they say that products are concentrated and far better in quality than other company products I never found so. They say one needs to use the product in very less amount so that it lasts long and in the long run it saves your money …. But what I found is the products are hardly effective when you use them in small amounts.
In India the Amway nowadays sells a food supplement product under the brand called Nutrilite which I found extremely over priced and they claim it of very much superior quality than other food supplement products available in the market. I and my father used some of their product but we never found it that good as they claim. And they spread some super natural stories of the curing power of these product which can hardly be explained by medical sciences. They praise the products so much that one actually gets brainwashed about the quality of the product and never cares to verify the quality. (Andhra Pradesh State Food Laboratory found the Nutrilite adulterated and the District Consumer Forum at Vijayawada imposed a fine of Rs. 1 lakh on Amway on this count..Editor). One thing I found the most objectionable about Amway business process is that it's not professional, transparent and it teaches one to become a great liar. I and many people like me who were new to the business were advised to make many false promises and what was most shocking is that they deliberately lie about their income. My upline was showing a plan to a person I invited and when the person asked how much I earned my upline said something vague like “ You can’t even imagine how much he is earning” … whereas I earned almost nothing from the business.
I want to write more but I don’t have time right now so I will write in future.

Friday, 10 October 2008

It is easy to imagine what happened to the apologists of Amway. They are too stunned to react or they have no basis or argument to answer the queries. They have no answer to the important query that the ex-factory price of its products is very low and the selling price is very high. They must admit that they are tax evaders and cheats.

Some of them claim that the Amway has mended its ways and changed its business tactics. By saying so, they did not realise that they are admitting that the earlier scheme of Amway was fraudulent. But people should realise that the amended scheme is also frauduelnt. The whole scheme is nothing but cheating the gullible.

The latest scheme of Amway boasts that the Amway has removed the admission fee and introduced many new features. What happened to the earlier crimes of collecting huge admission fee and renewal fee. They do not talk about earlier crimes.

People should understand that there is no time limit for any criminal action and the limitation does not permit anyone to cover the crimes. If they had beaten people with an iron rod now they are beating them with a soft rod. The only difference is the number of times people were beaten.

By simply claiming that the Amway has changed its business module and business model, the apologists only confirming the Amway's earlier crimes. One should remember we have been telling people from the beginning that Amway is a fraudulent company and now it changed its business tactics only to confirm the charges.

People realised the real intention of the Amway promoters and nowadays it has become hard for the Amway to find new members. That is why the Amway which was against advertising its products is now spending millions of rupees on the same.

Wednesday, 8 October 2008

One has to ask oneself a question how any business opportunity becomes illegal. The law is clear in this aspect. The Prize Chits & Money Circulation Schemes (Banning) Act, 1978 clearly says that if there membership and the member needs to enroll more members with the offer of commission it amounts to money circulation scheme and it is punishable.

Let us see how. If a member joins paying some fee to the company, it is flouting the norms of business. Why because, no person needs to become a member paying some amount of money just because he wants to purchase some product. If I want to buy a product, I can straight go to the shop or business establishment and buy whatever I want. But the fraud begins with the membership. And it continues with further enrollment with the inducement of commission. Nobody can purchase products without becoming member and nobody can purchase without being referred to by someone. Here comes the money circulation scheme. These fraudsters may alter their business models and camouflage with the sale of products and services. But basically they all do one thing, that is money circulation. That is what is called quick/easy money. Let us not fall prey to these machinations. If anybody cannot enroll members he may not get commission. But due to the inducement of more commission, he is compelled to chase or hunt for new members putting in lot of efforts.

Friday, 3 October 2008

Move over folks, new entrants are on the way to cheat gullible people with the promises of huge commissions and easy/quick money after merely becoming a member associate of their company. Meet MyVideoTalk. It is offering huge commissions for introducing new business associates to it and offering you riches unimaginable.

The modus operandi is a la Amway. It too has the same system of chain marketing with various levels of marketing. It also gives fancy names to its members once they 'achieved' in inducing more members into the scheme. The whole point is how many members you can rope in. If you can 'convince' more people to part with their money, you earn a lot of commission.

The MyVideoTalk too has the similar pattern of personal volume earnings like Amway. The only difference is this company was floated as recently as 2004 only. Still, it is spreading like water under the carpet and deceiving a sizable number of people around the world.

This is the reason that I have been terming that Amway is the mother of all scams. Everybody is taking cue from Amway and have been working hard to cheat people.

I hope people would realise the dubious schemes of these fraudulent companies and not fall prey to these machinations.

Recently, addressing a live phone-in programme organised by Rainbow FM radio at Hyderabad, I have realised and amazed at the number of people who got cheated in money circulation schemes. A number of people revealed how they were cheated/have been under pressure to join some scheme or other. Still, they do not know what to do. Even after realising they were cheated they hesitate to file a complaint against such companies. A number of people called me during the interview and after also to tell me how I saved their lives.

Many people including a sizable number of women told me that though they suspect that it is a fraudulent scheme they do not know how to identify the same. It is no wonder still many people do not know how to recognise fraudulent schemes on the face of it.

Kindly note the points how to identify such schemes.

If anybody tells you to become a member in any scheme by paying some fee, you have to immediately suspect that it is a fraudulent one.

Secondly, if you are told to enroll at least two more members to earn commission, your suspicion is confirmed.

Thirdly, if you are told that there is easy/quick money in the scheme, you have to immediately lodge a complaint with the police in the larger interest of the society.

If you are lethargic in lodging the complaint, you are harming yourself and the rest of the society.

We come across many people who lost their precious, hard-earned money in the schemes fraudulently introduced by companies like Amway, Herbalife and a plethora of others. But they never lodge a complaint with the police nor even share their bitter experiences with their other friends and relatives.

There are many reasons for this strange phenomenon. Let us analyse one after one.

1) Many people, who lost their money, generally lose it after joining the scheme as they could not enroll more members because they could not convince or could not deceive others. The fraudsters blame them for not enrolling more members stating they are not sufficiently motivated to get more membership. But the problem is when the scheme itself is fraudulent how can anyone convince others to join the scheme. Out of compulsion or when they could not say 'no' to their relatives or friends, they have joined the scheme and they could not do the same to others. I know a gentleman who joined the scheme at least four times, when his friends put pressure on him and he himself could not do the same to others. At the same time, he is not willing to lodge a complaint with anyone forget about the police. He doesn't want to lose relations with friends and relatives though he suffered loss. That is the weakness of people and the forte of these fraudsters. This is how the social fabric is being destroyed due to these fraudulent schemes.

2) While joining the scheme, the members are thoroughly 'trained' to induce more members into the scheme with factors like 'motivation'. If one fails to enroll more members he is only blamed for his/her lack of motivation. Naturally, he blames himself for the loss he/she suffered and never complain against anyone.

3) Another important thing is their strong belief in fatalism. The members who lost money in such schemes blame themselves by convincing themselves that it is their fate and their bad luck for the failure. But they never realise that the fault is in the scheme itself.

4) Moreover, people get ashamed of asking others to become after they learnt that it is a fraudulent scheme and that is why they drop themselves out of such schemes.

5) This happens nearly 90 per cent of new members not only in India but all over world.

Monday, 29 September 2008

Many a time we hear people praising that so and so company is an honest one conducting business legally. I would like to remind them that Honesty is not a relative term. It has to fulfil many things. For the simple reason that some company is given permission to conduct business by the government or the company is conducting business openly by issuing demand drafts and its operations are computerised, do not make it an honest company. We have to make sure that these companies are not violating the law of the land.

The glaring example is the recent criminal case against GoldQuest International Ltd. Its members argued vehemently that the company is a legal one and it is conducting a good business transparently. Once the criminal cases are filed against them, everyone went into hiding instead of answering to the courts of law that they are doing honest business.

Let us recall what the assistant solicitor general of India commented in the Amway writ petition No. 20470 and 20471 in the Andhra Pradesh High Court that the scheme the Amway is implementing is not the one accorded permission by the Indian Government and the Amway cannot use the government permission as shield to escape its liability.

Yet, people innocently or rather cunningly argue that the Amway is conducting business legally. This is only to deceive themselves. The important thing is that they are induced to become easy/quick rich and they are in the hope that they would become rich sooner or later. But by the time they realised it is a mirage, the damage would be done and they would be bringing in more and more friends and relatives into the web of the money circulation scheme. These friends and relatives cannot complain against their introducers fearing that they would lose them forever. That is the secret behind the Amway scheme.

Another argument is that the Amway is refunding the money if the customer is not happy with their products. Still, the customer is bound to lose money on account of returning the products and the membership fee.

Regarding ethics, when the whole scheme is evil and ingeniously designed to bring in more and more people into it in the name of attractive commissions, what is the point in discussing ethics. The whole scheme is against the law of the land i.e. Prize Chits & Money Circulation Schemes (Banning) Act, 1978.

Tuesday, 23 September 2008

The question we face often is that there are no complainants against Amway. Why? The answer lies inherent in the Amway's cunning strategy. You go through Amway literature. It encourages the IBOs to make their relatives, friends and even family members to become IBOs. It also suggests to treat anyone who refuses to heed to the demand to become an IBO as an enemy and cut off relations/ friendship with them. That is how it has become a threat to the social fabric of the society. If anybody feels cheated or actually loses his money, he cannot file a complaint against his relative or close friend. He feels that he had already lost money why lose friendship or relationship. In a case in Andhra Pradesh, a village level worker committed suicide after his boss, a mandal revenue officer exerted pressure on him to continue as an IBO giving him money on promissory notes. He cannot repay the loans nor say anything against the boss fear of losing his job.

That is the secret of Amway's business. I have already mentioned about a a set of doctors -- an ENT surgeon, an orthopaedician and a neuro surgeon in Vijayawada who prescribe Amway's Nutrilite dietary supplements to their patients. Can they say against the doctor who is treated as a living god.

The crux of the scheme is it is running a scheme which is against the law of the land. In the name of selling products, the Amway is indulging in money circulation scheme which lines the pockets of the people in the top vortex only. We have to remove the veil and see the real motive behind the scheme. Otherwise, there is no explanation for the sale of a toothpaste at an exorbitant price of Rs. 120 though the Amway is paying tax on the ex-factory price of Rs. 16 to the Government. Who is sharing the rest of the amount attracts the money circulation scheme. You can go through older posts and find out the provisions of the Prize Chits and Money Circulation Schemes (Bannaing) Act, 1978 to get clarification on the relevant portions of the law. This is only a single example and is applicable to all other products. Now my friend, you can see why the Amway scheme is against the law and you can also understand why nobody is complaining against the Amway. If you have further queries, feel free to ask questions.

Sunday, 21 September 2008

Beware! My countrymen! More and more fraudsters are entering the scene of deception to hoodwink you and run away with hard-earned money. They lure you with huge profits, overnight riches and easy money with their ingenious schemes. They abet you to cheat your own neighbours, relatives, and even your own family members. Their ultimate goal is to line their own pockets with your, in fact our, money.

Multilevel marketing is raising its ugly head in yet another shape and they are now introducing new arenas. This time, they have come openly in insurance sector. As usual, the bureaucracy is in its deep slumber. They just close their eyes making everyone believe that everything is normal.

Many advertisments are appearing in Classifieds soliciting the gullible people to become members of its insurance schemes offering earnings anywhere between Rs. 1000 to Rs. 1.25 lakh depending upon your performance i.e. depending upon your willingness to cheat your friends, relatives, neighbours and who else.

They appeal to you to buy an insurance policy for a minimum of Rs. 5,000 and introduce two more members to become policy holders. Lo! Behold! Now you are out to make a lot of money with the downline members enrolling more members into the network. They say that sky is the limit.

Whenever you come across such advertisements, try to tell your friends that these ads are traps and not to fall prey to them. If possible, try to file a complaint with the police. Anyway you may not be successful at this. But don't get dejected. Keep on trying to stop these fraudsters from exploiting the weakness of our fellow humans.

Tell everyone that multilevel marketing menace is eating away the vitals of our economy and it is not good for the society and its social fabric.

Tuesday, 16 September 2008

Truth is bitter my friend. But truth always triumphs. That is the experience of our ancient civilisation. That is why our slogan is 'Satyameva Jayate'.

More often than not we refuse to recognise the truth and claim whatever we believe is truth. The truth is not relative and it won't change from person to person and institution to institution. One may argue that what he believes is truth. The truth is Amway schemes are ingeniously designed to cheat people. The Amway has no answers to the questions raised in this blog from time to time. It does not answer why anybody needs to enroll as member paying hefty fee to purchase some products and it does not answer why a member needs to renew his membership to further purchase products. The 'truth' is that the Amway is lining its pocket with the hard-earned money of people.

No thief admits that what he committed is wrong. Instead he builds up an argument that what he has been doing is right. That is what is called 'defence mechanism' in psychology. Let us remember once again that ''the easiest thing in the world is to convince oneself that one is right''.

Discussing whatever you think is right is not waste of time my friend. It will be enlightening if more people discussed more issues and then only truth will come out. That is our ancient civilisation. Try to be honest to yourself and don't try to indulge in self-deception.

In the latest twist to the unlawful activities of the infamous Amway India, the Andhra Pradesh State Government has issued a Government Order on 15-09-2008 bearing No. G.O.M.S. No. 178 published in the official Gazette restraining Amway India Enterprises from publishing any material/advertisement which are promoting and/or conducting the in contravention of the provisions of the Prize Chits & Money Circulation Schemes (Banning) Act, 1978. The G.O. also made it clear that every copy of the publication/website to be forfeited to the Government of Andhra Pradesh. The G.O. could be viewed at http:/goir.ap.gov.in/Reports.aspx.

Monday, 15 September 2008

What happened to ibofightack blog. It is not appearing these days. It seems that he is hit hard in the gut with the argument in this blog. Silence is no answer my friend. Come outwith some meaningless comment or senseless argument. A Cheat is a cheat whatever name he calls himself. The Amway has been defrauding this country for nearly a decade and it is wonder no vigilante organisation is watching them barring a few officers. How these fraudsters are allowed to loot the country is amazing.

The assistant solicitor general of India in the writ petition filed by the Amway itself, stated in his argument and quoted by the Honorable Judge of Andhra Pradesh High Court in Para No. 12 of the judgment, that the scheme approved by the Government of India is different from the scheme which the Amway is executing and, therefore, the approval given by the Government of India cannot be used as a shield by the Amway for carrying its unlawful business.

It is baffling why the Government of India did not initiate action against the company when its solicitor general clearly stated that the Amway is indulging in unlawful activities.

Anway it is high time some action is initiated against Amway and closed its unlawful activities in the country. Even the Chinese government banned the pyramid scheme in their country.

Wednesday, 10 September 2008

Amway has been, beyond reasonable doubt, proved to be indulging in unlawful activities. Yet, the so-called Fourth Estate has become so short-sighted that it begs the law-violators to become sponsors of their activities. It is no secret that the media survives on advertisements only. But it used to judiciously exercise its option to raise its revenues. Of late, probably due to the acute cut-throat competition and growing over-head expenses, it is indulging in all types of activities to fill its pockets.

The latest is the painting competition at Vijayawad organised by Eenadu group and sponsored by Amway. It is apt to recall here that Eenadu has published many stories about the nefarious activities of Amway. Yet it falls flat on its belly for sponsorship accepting the tainted money from Amway. For a giant like Eenadu group is it necessary. It is high time the media made some introspection and act accordingly.

Friday, 5 September 2008

In an exclusive interview, Mr William Pinckney, managing director of Amway, lamented that many companies are indulging in money circulation schemes without actually selling any products as if Amway can indulge in such schemes by selling products. What exactly Amway is doing is nothing but money circulation scheme. Otherwise, is there any explanation or any other name for the multilevel marketing adopted by Amway. It is nothing but money circulation schemes. They found a bakara in the name of the reporter of Deccan Chronicle who readily accepted whatever he is told and published accordingly. The reporter never examined nor verified the veracity of the statement made by the managing director.

Amway is one of the members of IDSA and is the mother of all scams. The direct selling they refer never benefit any customer or consumer.

Amway sells a toothpaste for Rs. 120 though they pay tax on it on the ex-factory price of Rs. 16 only. If it is direct selling the end-consumer should get the benefit of buying the toothpaste at Rs. 18 or Rs. 20 avoiding all middlemen.

Amway can never explain why it is charging Rs. 120 for the toothpaste and still the end-consumer is getting benefited. It is high time the Amway's evil veil is removed and thrown out of the country along with its evil designs.

The Amway never reveals that China Government has stopped its pyramid scheme and put objections to the multilevel marketing. They never reveal what type of business it indulged in People's Republic of China. If at all it is doing business in China, it must be other than multilevel marketing.

Now the Amway is shedding crocodile tears that many companies are indulging in money circulation schemes while actually it is the company which is promoting money circulation scheme in the name of direct selling.

For instance, a rice merchant in Ponnuru, Guntur district, is selling 50 kg rice for Rs. 2000 and asking people to get two more people to buy rice for that price by offering commission to them. He is also selling product and like Amway he is offering commission. Shall we call it genuine?

Tuesday, 2 September 2008

Microfinance Institutions which have been lauded as new age messiah for the poor and downtrodden have turned out to be monsters with inherent faults in the system. It is high we checked its acvitities as it is eating away into the vitals of our economy.

The micro finance institutions borrow huge sums from commercial banks at low interest rate and lend it to the poor people on several conditions. The interest rate is high and repayment is very harsh. In some instances, which were brought to the notice of CORPORATE FRAUDS WATCH SOCIETY, poor women who are dragged into the web of easy finance are forced into untoward conditions to repay the loan. To be frank, they are asked blatantly to become prostitutes to repay the loans. Now corruption has become rampant among micro finance institutions, it is high time the officials reviewed the situation and verify how some people are lining their pockets and how the gullible are being dragged into the web.

Many microfinance institutions (MFIs) operate in ‘difficult’ countries with a weak rule of law, open and latent conflicts, and corruption affecting everyday live. Social and private investors who finance MFIs may therefore be concerned about the benefits of their engagement and the sustainability and profitability of their investments. Obviously, there is no corruption-free world. Corruption may occur in an MFI as it may in any other type of company, organisation or government institution. Empirical experience, together with the theoretical line of reasoning, however, provide good reasons to assume that corruption in MFIs is not a big issue. How are MFIs affected by corruption (and money laundering)? How do they deal with this situation? And what is the appropriate benchmark to evaluate the outcome?

Corruption and money laundering - Definitions
Corruption is commonly defined as the abuse of official power for private gain or, more generally, the misuse of a position of trust (within administration, private and public companies or politics) for a dishonest personal benefit. The main forms of corruption involve bribery, embezzlement, fraud and extortion. Depending on the focus, corruption may also take very subtle forms, such as attending unnecessary seminars or conferences implying higher inefficiency within the company or institution. Sometimes corruption is even understood in a very broad context as “something against law”.
Money laundering refers to the act of concealing the origin (source and identity) of funds, either because funds have been generated by illegal means or because they are subject to reporting requirements that involve paying taxes and other duties. Money launderers may operate through financial systems or fictive companies and transactions. In particular since 9/11 concerns about terror financing have gained a lot of attention. There are different levels where
corruption may affect MFIs directly and indirectly The most probable type of corruption and financial crime that might occur at MFIs is fraud. Although fraud occurs in all business sectors, institutions dealing with finance are specifically exposed to it. Loan officers and managers may make fictitious loans, transfer funds into their personal accounts, receive bribes or simply steal cash .
Corruption-related concern may also be linked to the ownership structure of an MFI. Non-governmental organizations (NGOs), for instance, tend to be more focused on social benefits rather than financial outcomes and profitability. As majority shareholders in MFIs they may on average demand less stringent internal controls than private, profit-maximizing owners and thereby unintentionally open doors for fraudulent behaviour. By contrast, other people argue that NGOs often have a social and church-related background bringing in higher moral standards and therefore less corruption. Last but not least, corruption may origin from activities
of MFI owners themselves, abusing MFI lending for their own mission or political agendas, for instance, granting loans to buy votes. This type of political corruption has not been a big issue but has occurred in some cases where governments have been direct or indirect owners of MFIs.

Thursday, 28 August 2008

It is time Amway checked its blood pressure as it is breathing hard to resist the moves of new thugs in its arena. Mona Vie, a new entrant in the multilevel marketing in the United States of America, has causing shivers to Amway which has already filed a suit against the other fraudster that it is encroaching upon its right to cheat people. What Mona Vie is selling is nothing but fruit concentrate which it deceptively claims that it would cure arthritis and even cancer and sell it an exorbitant price. In fact it also indulged in money circulation scheme branding it as good business opportunity.

We, in India, have a similar product with the brand name of 'Noni'. It is quite interesting to observe that even thugs fight for space instead of accommodating each other to loot people. It is hightime people watched all these crooks with open eyes and not to fall prey to these fraudulent activities of these cheating companies.

Wednesday, 27 August 2008

Amway is foundering and fighting for its life. New upstarts are challenging it, riding on the political and legal highway that Amway paved. Though Amway is huge, it is also hugely vulnerable, a house of cards.The newly challenging MLMs use all the tricks that Amway taught them and they play off against Amway’s long rap sheet of lawsuits, bad publicity, regulatory fines and its long trail of “quitters and losers.” This gives the new schemes the chance to claim they are “better” or “different”, and really do offer an income opportunity.The new schemes also enjoy the unregulated legal environment that Amway paid for. No worries about the FTC in America where Amway is based. After pouring millions into the coffers of the Republican Party, Amway got President Bush to appoint an Amway attorney as FTC chairman. The agency was put on a chain and immediately stopped enforcing the law against “pyramid selling schemes.” Amway was safe for a time, but it also opened the inferno’s gates for new MLMs to devour Amway’s base. The newest upstart, called Monavie, achieved a billion in sales and a million followers in less than three years. It sells fruit juice that is priced higher than a bottle of fine French wine. Blatantly deceptive claims and promises about this juice curing arthritis and preventing cancer are all over the internet and are routinely made by Monavie's “independent” salespeople. Much of Mona Vie’s “sales” were taken right out of the revenue/recruitment base of Amway and its old protégé, Herbalife. Amway has sued Monavie and is trying desperately to stop the hemorrhaging of recruits. But, it is not Monavie that is causing Amway’s collapse. As an upcoming False Profits Blog will reveal, Mona Vie offers nothing more than Amway. It is not “different” or “better.” It is the same. The same false promises of income based on endless chain recruiting. The same promotion of ridiculously overpriced, over-hyped products that most new recruits stop using within a year but buy for a few months while they still believe in false income promise.. Mona Vie is causing the very same financial losses to 99% of its recruits that Amway has perpetrated for decades. It is using the same book of deceptions honed to perfection by Amway, and Mona Vie is structured exactly like Amway. It has even imported Amway’s Top Gun recruiters, the very same tricksters that publicly admitted in a lawsuit that they were running the notorious “tools” scam at Amway.No, Amway’s apocalypse has been a long time coming and is of its own doing. For about 25 years, Amway has been on a pyramid recruitment rampage all over the globe, escaping saturation levels in older markets by opening new ones. The truth is finally catching up with Amway. Saturation time has arrived. Eventually, the recruitment spree (70% quit each year, 99% lose money) led Amway to the last and largest market on earth for pyramid exploitation, China. But Amway’s reputation had preceded it. China enacted a new law in 2005 that bans Amway’s keystone pyramid pay plan. And some of Amway oldest markets, the USA and England, are now showing extreme distress. In England, Amway is being prosecuted for fraud. English regulators are trying to kick Amway out of that country, crippling it in Europe. Already, Amway has been ordered to drastically reduce prices, ban its “tools” scheme and clearly disclose the reality of enormous loss rates suffered by its hapless recruits.In the US, some of Amway’s top insiders have become whistle blowers, revealing that less than 5% of Amway products are ever retailed; its products are “hopelessly overpriced”; that it is impossible for a new recruit to be profitable; and that within a few years, Amway churns nearly 100% of its entire “sales” base. The insiders themselves charge that Amway is operating illegally.These charges are mirrored in an important class action lawsuit brought in US courts by the law firm, Boies, Schiller and Flexner (which represented Al Gore to the Supreme Court). This firm has the expertise and the resources to sustain a potentially devastating financial attack on Amway. The case has overcome Amway’s main legal defense – that Amway recruits are not entitled to a day in court because they agreed, when they signed Amway’s contract, to submit themselves to Amway’s own “arbitration” system. The judge termed the Amway contract “unconscionable.”Perhaps the most obvious sign that Amway’s Judgment Day is at hand is Amway’s recent media advertising. Amway ads are now running on the Keith Olbermann show on MSNBC and on CNN and in magazines. These strange new ads pretend that Amway is a common household name, associated with products, like Tupperware is, and not with a massive financial scam, besieged by lawsuits and whistle-blowers.Actually, the Amway name is so ruined by widespread association with pyramid scam that Amway tried to replace it in North America with the “Quixtar” name. The name change trick did not work. Now, Amway is trying to resurrect, redefine and polish up its defiled name with deceptive advertising. The ads vaguely refer to the Amway “opportunity.” Yet, just like the old tactic that became Amway’s infamous trademark – inviting people to a social event without telling them it’s actually a high pressure Amway recruitment meeting – the media ads dare not describe the “opportunity”. 99% of all who try it lose their shirts! The ads are clear signals of market distress. In the end, the Amway ads are an effort to uphold a crumbling house of cards.
Robert L. FitzPatrick, Pres.
PYRAMID SCHEME ALERT
1800 Camden Rd. Ste. 107 #101
Charlotte, NC 28203
704-334-2047RFitzPatrick@PyramidSchemeAlert.orghttp://www.pyramidschemealert.org/

It seems that our Amway friend has turned a stoic philosopher. He is not at all reacting to the comments. On the other hand, he is inviting us to participate in another forum. We did not invite him to respond to our blog. They only started and it is their responsibility to respond to our queries if they are honest and committed to their cause. They must answer to the queries wholeheartedly without deviating from the subject. They must also answer as to why the Amway is not an exploiter. They have to prove beyond doubt that the Amway is not siphoning off money from our country. The ball is in their court. React my friend. Say something.

Thursday, 21 August 2008

The fallacies put out by Amway
1) Profit is earned through sale of products
2) No commission is earned through recruiting
3)Amway India sales have increased substantially in the past year, not decreased
4)Amway proa ducts have won numerous independent consumer awards.

Hi guys Excellent, the way the so called business of Amway is explained in a nutshell is just excellent. I would like to say that right examples could also be given to support a wrong cause. Amazobies (the people in Amway business) do exactly the same way. Before I go deep into the subject, I would first put certain records straight.

In the Amway "business" the language used by the IBOs (Independent Business Owners) is basically altogether different from other human beings. Words carry different meanings with an underlying aim to confuse people so that they do not understand that they are cheated and reach out to the real back end business.

For example one of the salient features of Amway is claimed as "Profit is earned through sale of products". Correct and it is 100% correct. The Amway Company does earn profit by selling its products to its stupid IBOs and it should be understood accordingly. This is how it is? The "sale of products" in the above proposition is nothing but the “sale of products by the company” to the IBOs who are in real terms the “consumers” although the fact remains that they do not buy these products to consume but only to resell which any way is impossible.

The mandatory "purchase of products" made by every new IBO at the time of walking into the trap of Amway business is the only actual “sale” to the company achieved through the false promises of making big money and the company earns a huge profit as it rightly claimed. It is to be noted that the people who take up the business of Amway do not earn any profits just by selling the products of the company because it is next to impossible to sell these products in the open market particularly in India-like third world countries. Then how would these stupid IBOs earn profits, that too, so huge profits that this deceptive company promises through its “senior” people (uplines) in its regular meetings showing testimonies of success stories?

Is it possible to earn great profits and big money just by selling products to the prospective consumers? Assuming that it is possible, how do the IBOs to identify these prospective consumers every time to have regular sales so as to make good profits? More so when there is no publicity back up by the company promoting the products by way of advertisements as the company itself claims that it does not “waste” money on publicity and the money, thus saved is instead passed on to the consumer?

How much time do the IBOs have to spend in convincing the prospective consumers for selling them the products by telling them all the lies and pestering them to buy? Where do thye have to go everyday to sell these products and who would buy these stupid products for such an exorbitant prices when established and regularly advertised brands are available for much cheaper price? And ultimately what is that the IBOs get in net effect by confining themselves to only selling the products and thereby earning a profit?

Having found that it is impossible to sell these products to unknown people, the IBOs try to catch hold of friends, relatives, colleagues, neighbors, acquaintances, etc, and try to use all their family and social leverage to “sell” them the products or try to give them freely so that they would buy them in case they are satisfied with their quality or entice them into the business with copy cat promises which they themselves have not been benefited. In any of these possibilities, the IBOs do not earn any profits; forget about those huge profits but by enticing and enrolling new people into the business every time, because it is alone the company that gets a sale.

Fraud, according to Wikipedia, is a deception made for personal gain or to damage another individual. All these multilevel marketing companies indulge in fraudulent activities. Why they are fraudulent because the method they adopted, i.e., money circulation scheme, is expressly prohibited by the law of the land. They may camouflage their activities with product sales or service providing. But we have to remove the veil and look for the real activity of these companies.

In the case of e.Biz, it has indulged in money circulation scheme in the name of providing the service of computer education. The company first charged exorbitant fee from the members and later induced them to bring in more members with the offer of commission. If they enroll more members they would get more commission. If anybody has any doubt, they can go through the Prize Chits & Money Circulation Schemes (Banning) Act, 1978 and it is available in the older posts of this BLOG.

My learned friend raised a doubt that the Harvard and Stanford universities praised the multilevel marketing schemes stating that they are best form of business. For that matter, astrology is a subject in the Telugu University in Andhra Pradesh. Can we say that it is scientific and can be proved beyond doubt. Let us not be carried away by them. One close look at the business model of Amway revealed in the articles of this BLOG clarifies that the scheme, in fact, is nothing but money circulation scheme benefiting only the company with huge margins. And the common man is the loser buying things at an exorbitant price and caught in the web of inducement of more commission. Anyway, truth is bitter and people who are getting the benefit of the scheme never accept that it is a fraud. Amway indulged in fraud that is to make personal gains and nothing else.

Wednesday, 20 August 2008

Come out my friend. Let us speak truth and stick to facts. It is convenient to say that this is not in the priority list to answer the genuine doubts. But the fact is that the Amway is unjustly lining its pocket with people's money depriving millions of people their hard-earned money. And people who line their pockets never concede that. As long as you find new victims, there would be no problem. But once the chain breaks, the problem starts.

So far this column never indulged in mudslinging or distorting facts. Facts are there to see. The facts are quoted from the Writ Petition filed by the Amway in the Andhra Pradesh High Court. And if anybody thinks that those facts are fictitious nobody can help it. Let us be honest. And it is hard to think that a fraudster or a crook could be honest. The whys were never answered and my friend chooses to cast aspersions about rivals paying for writing these queries.

Anyway it would be interesting to learn about the rivals, who are they and why there is rivalry. It would be better if the rivals' names are pronounced.

Saturday, 16 August 2008

It has been umpteen times made it clear that this movement is against all multilevel marketing companies whether the fraudsters are from abroad or Indian crooks. But the mother of all scams is the Amway which brought this multilevel marketing in the guise of product sales and actually indulged in money circulation scheme. That is why the main target is Amway. Ask any multilevel marketing agency they point out at Amway and say when they are doing business why not we.

Our IBO friend is conspicuous by his silence over the Rs. 1,800 collected by the Amway for merely becoming a member. Does any businessman collect subscription fee for purchasing products from him. That is the point. And merely saying that the rival is paying for pointing out the easy and quick money racket is nothing but cover up.

Ignoring those comments shall we move forward for the next course of exploitation by the Amway.

The terms and conditions of 'Distribution Renewal Form' supplied by Amway clearly state the following issues.

Condition No 3: The distributionship agreement if not renewed by Amway shall stand terminated on December 31 on or expiry of one year from the date of distributionship, as the case may be. Condition No.12: The Renewal of subscription fee including Block Renewal Subscription fee is non-refundable. Condition No. 14: Renewal of subscription fee is mandatory to continue with business and maintain your position in line sponsorship.

It can be safely said that from 4,50,000 distributors, the company would get a sum of Rs. 44,77,50,000 (Rupess Forty Four Crore Seventy Seven Lakh and Fifty Thousand only: at the rate of Rs. 995X4.5 lakh) per annum towards renewal fees on completion of every year without offering any service to the distributors. This can only be stated as Easy and Quick money.

Let us look at the renewals for the last three years: From September 2004 to August 2005, the Amway has received Rs. 24, 91, 35, 424; From September 2005 to August 2006, it has received Rs. 25,71,80,305 and from September 2006 to August 2007 the Amway received Rs 30,78,66,574 as renewal of subscription fee. This is apart from the new enrolments.

In the name of merely subscription renewal the Amway has garnered several hundreds of crores of rupees. If this is not easy and quick money what else is my friend.

Friday, 15 August 2008

So far, the so-called apologists of Amway failed to justify many a point and it could be ascertained giving a glance at the earlier articles and their meek responses.
Let us move further to find out how the Amway is lining its pocket in easy and quick way.
A person who wants to join as a distributor or independent business owner (IBO) for Amway has to pay a subscription fee of Rs 4,400 out of which Rs. 1,800 is directly credited to the account of Amway company. Amway in the Writ Petition Nos.20470 & 20471 of 2006 filed by it in the Andhra Pradesh High Court categorically stated that they have enrolled 4,50,000 distributors all over India. Even taking this as true, a sum of Rs. 81 crore was appropriated by the company at the time of enrollment of the members. Isn't it easy and quick money got by Amway from the called distributors/members without offering any service.
Let us move on further, a distributor has to maintain a minimum business level of 50 personal volume (PV) to qualify for getting higher commission and that is sufficient inducement for the members to strive relentlessly for maintaining the PV level at or above the said minimum level. To ensure that he would not lose the opportunity of receiving performance commission @ 15% and above every month (with effect from September 1, 2007), @ 21% and above every month between September 1, and August 31, 2007)each IBO has to distribute/purcahse/sell Amway products worth Rs.2,250 every month lest he becomes ineligible to get commission at higher rate. Thus each member is forced/induced/lured to purcahse Amway products worth Rs. 2,250 every month to keep his chance of getting substantial commssion alive. Thus Amway would automatically get a business quantum of Rs. 1,215 crore per annum without offering any service to the distributors/members, getting an an astronomical amount without any effort on its part, which can be stated as windfall. Isn't it easy and quick money.Amway conveniently refers this as turnover by sale of products irrespective of whether its IBOs sell the productrs or not.
We shall explore more avenues of Amway exploitation in the coming episodes.

Tuesday, 12 August 2008

It seems that our friend is hurt with my latest piece. Because truth is bitter and hard to swallow. Before moving forward with more bitter truth, let us wait for some more time for a comment or two. People who line their pockets with other's hard work never take it light when they are shown the hard reality. Shall we wait for some more time for our Amway friend to respond. Or he may be busy collecting data from Amway India Enterprise regarding the payment of tax to the Andhra Pradesh State Government on the ex-factory price of Amway products. Anyway let us give the 'IBOs' some more time to respond.

Sunday, 10 August 2008

The easiest thing in the world is to convince yourself that you are right. The Amway apologists do the same thing. The IBO who did personal sales worth Rs. 4,500 and enrolled his downline members cannot claim that all the sales did by those members as his own. Then the downline members have nothing to claim as their own sales. If they claim again that amounts double jeopardy.
My fight is against all types of these fraudsters whether they are Indian crooks or from abroad.
Let us move forward ignoring these comments. For the personal sales of Rs. 4,500 at Stage-1, each IBO would make Rs. 56,925 per month and the Stage-2 IBO would make Rs. 9,540 and the Stage-3 IBO would make Rs. 1980 and the Stage-4 IBo would make only Rs. 1035 per month.
Moreover, if an IBO fails in any month to make such purchase, he will be denied the applicable bonuses and commissions for that month on the downline volume which will then most unfairly pass on to the next eligible upline IBO who satisfied this requirement of personal purchase in that month.
The provisions of the Indian Contract Act prohibits unlawful enrichment of one at the cost of many. Being the promoters, the initial members or uplines to the majority members into the scheme get easy and quick money without any effort. Thus they are unlawfully enriching themselves at the cost of innocent distributors downline.
Therefore, a substantial part of the income which the first sponsor member of the group gets indubitably depends upon the event or contingency relative of the enrollment of members into the scheme downline. This can only be stated to be easy and quick earned by its distributors.

Saturday, 9 August 2008

Amway repeatedly uses the Sales and Marketing Plan of 6-4-3 principle in its publicity (it is available at http://www.amwayindia.com/images/SalesMarketPlan.jpg). According to the plan, initially a person (stage-1) sponsors six members (stage-2) and these six members in turn enroll/sponsor four persons each totalling to 24 members and these 24 members in turn enroll/sponsor three members each totalling to 72 members (stage-4) thus making a total of 103 members known as one leg of the sponsor at stage-1. In this illustrative example, as per the calculation done and shown by Amway itself, the IBO at Stage 1 earns Rs. 56,925 per month for enrolling/sponsoring 102 members his donwline though his monthly business is only worth Rs. 4,500. In conventional distributional channels, it is not possible to get Rs. 56,925 for selling products worth Rs. 4,500.
IBOs never register with local authorities for selling products. Some top level IBOs may be incorporated their entitites but all other IBOs remain mere independent business owners without registration. Simply claiming it is false, it cannot escape its liability.
Glister toothpaste or for that matter for all its products, the Amway India pays sales tax to the Andhra Pradesh Government as per the cost of ex-factory price of its products. IT is easy to find with Amway India to find how much ex-factory price it is fixing for its products and how much tax it is paying. In fact, it is paying sales tax for the Glister toothpaste claiming its ex-factory price as Rs. 16 only.
It can be checked with the Indian subsidiary of Amway.

Friday, 8 August 2008

When one's point is weak, their voice becomes louder. Instead of making their own point, what is point in hurling epithets. It only shows the arrogance of presenting one's case forcibly.
Let us come to the point. According to the tax paid by the Amway to the Indian government, the ex-factory price of Glister toothpaste is Rs. 17. But it is sold to the end-customer at a whopping price of Rs. 120. Now who is sharing the difference of price. This is only an example.
The direct selling is age-old. The milkman who directly brings milk to your home and the farmer who brings to you vegetables directly from his farm. The direct selling indulged in by the racketeers may be hundred year old but it would not make it legitimate. It was formulated by the fraudsters when there was no law of the land anywhere in the land. That would never make it legitimate. It is a fraud pulled on people for decades and it is high time we put an end to it. They always look for new gullible people to fall prey to the smooth talk and 'good business' oppoeruniry.
About the philosophy of sharing, it is not my philosophy but that of Amway. The Amway while applying for the company registration stated that its philosophy is to allow the consumer of saving additional costs. Instead of saving, he is being shaved while buying a Rs. 17 worth toothpaste for Rs. 120.
Moreover, these intermediaries never got registered as a trader or shopkeeper or a business house though they 'buy' in huge quantities. They never pay any tax to local authorities for running business.
The truth is bitter.

Wednesday, 6 August 2008

Congratulations to the Warangal police under the able guidance of the star police officer, Viswanath C. Sajjanar who busted another racket. This time it is a computer education company which indulged in money circulation scheme in the name of giving computer education to the youth. The modus operandi is same that of Amway which has been into money circulation scheme in the name of selling products.
On 05.08.2008 basing on a specific complaint, a case has been registered vide Cr.No. 338/08 U/s 385, 420 and 34 of IPC and Sec 4, 5 & 6 r/w 2 (c), 3 of Prize Chits and Money Circulation Scheme (Banning) Act, 1978 of PS Hanamkonda against “eBIZ.com Pvt Ltd.”, Pavan Malhan, Managing Director of eBIZ.com Pvt. Ltd., Ayyappa Swamy, Aditya Bhogaraju, Mohith Manjunath, Rajesh Kumar, Phani Kumar etc.
The complaint reveals that the complainant was trapped by eBIZ.com members and they induced him to become its member. After taking membership he was initially asked to enroll further members to get more commissions. Later on he was harassed mentally in this regard. The complainant further explained about the details of the scheme which involves enrollment of members, commission earned and also the titles given to various members depending on their enrollment.
eBIZ.com Pvt Ltd. has started its business in India from 2001 headed by one Pavan Malhan with its Head Office at Noida, U.P., and started promoting computer educational programme. In the name of computer educational programme, they have schemes which are in the nature of enrollment of members.
To become a member of the scheme, a person has to pay Rs. 7, 585/-. Then the member has to further enroll more members to earn more commission. The enrollment is as per Binary plan.
If the associate sells eBIZ educational programme and web first 3 packages with 1/3:2/3 ratio under him he will get Rs.2000/-, for next 3 sales he will get Rs2000/- with 1/3:2/3 ratio, for another 3 sales he will get another Rs2000/- and this will become a cycle of 9 Sales and the associate will get a total of Rs.6000/- and for the 2nd, 3rd, 4th, 5th cycles of each 9 sales, the associates will get Rs. 3000/- for each cycle. For the 6th cycle of 5 sales the associate will get Rs. 8.000/- and the total sales will become 50 which is also called an ORBIT and the total sum of Rupees earned by the associate will become Rs. 26,000/-. From the 2nd Orbit onwards the associate will earn for 1st, 2nd, 3rd, 4th, 5th cycles of each 9 sales get Rs. 2,500/- each and for the 6th cycle of 5 sales the associate will get Rs. 7,500/- and the total sales become 50 and the earning for the 2nd Orbit will become Rs. 20,000/-. Thus depending upon the enrollment the chain continues and the member continues to get commissions.
Depending upon number of members enrolled, the members are given fancy names like:-
Silver Associate, Gold Associate, Diamond Associate, Diplomat, Silver Diplomat, Gold Diplomat,Diamond Diplomat, Ambassador, Silver Ambassador, Gold Ambassador, Diamond Ambassador, Chairman Circle.
1st Step 3 Sales: one gets Rs.2000 with sales in the ratio of 1/3 : 2/3
2nd Step next 3 Sales one gets Rs.2000/- with sales in the ratio of 1/3 : 2/3
3rd Step next 3 Sales one gets Rs.2000/- with sales in the ratio of 1/3 : 2/3
Thus every member of eBiZ.com Pvt Ltd., tries to enroll new members and thus accumulate sales, orbits so as to enable them to become Sliver Associate and thus go up the ladder to become Diamond Diplomat to Chairman Circle and so on. If he/she fails to get further enrollment, then the member tries to make his own sales to accumulate orbits and be in the rat race.
The members also arrange meetings in star hotels, big hotels with entrance fee for luring and inducing public.
Further people specially the middle class, innocent students are lured into such schemes and thus they contribute money and waste their precious time to such schemes and thereby set up a chain of further contributors, from each of whom the original contributor will get back an amount of money he had initially paid to the scheme and thereby gain financially. Each of the second set of contributor is expected to generate further sets of contributors likewise and gain money. It is financially impossible for such a chain to work endlessly with profit to everybody concerned.
All such schemes finally get broken at some stage, resulting in financial benefit to a few who had joined at the beginning of the scheme and financial loss to a very large number of contributors who had joined the scheme at a later stage. Such schemes mostly work to the detriment of middle class people and innocent students, who invariably look for some short-cut or the other for augmenting their income. Thus the gullible public would have just fallen for the scheme without understanding its non-workability.
In this case further investigation is on. Alert: Thus the public is once again requested not to fall prey to such Direct Marketing, Multi-level Marketing, Network Marketing, Referral Marketing, Sponsor Marketing, Chain Marketing etc. Such schemes are prohibited under the provisions of the Prize Chits and Money Circulation Schemes (Banning) Act, 1978.

Tuesday, 5 August 2008

Shall we take it for granted that our friend is silent over the issue because it is the last nail in the coffin. But it is not so. There is more to come. Lies, lies and again lies regarding the scheme and its implementation. Ok my friend break the silence and say something even if it is ridiculous and meaningless and even stupid coment. Let us go deeper in the scheme in the next episode.

Sunday, 3 August 2008

Let us move on further on the role of intermediaries of Amway as there is a stone-wall silence on the fraud of foreign direct investment (FDI) in India. Let us take it for granted that the Amway lied to the Andhra Pradesh High Court regarding the FDI in India. And as per the meaning of direct sales, Indian Federation of Direct Selling, which is an independent body, defined its own version of direct selling and the members of the Federation are only bound by it. Direct selling means only direct selling goods and services to the customers. There is no question of ignorance or arrogance.
Before citing the number of intermediaries in the Amway business model, let us look at the various incentives/commission/profit paid from the cost of Amway products to the intermediaries. Profit @ 20%, maximum peformance @ 21%, leadership commission @ 4%, Ruby commission @ 2%, monthly depth commission @ 1%, Emerald commission @ 0.25%, Diamond commission @ 0.25%, Diamond Plus commission @ 0.25%, Founder's Achievement award Rs. 6 lakh - Rs. 264 Lakh, Founder's Distinguished Service award Rs. 240 lakh - Rs. 960 lakh and All expenses paid-up trip to Peter Island at a substantial cost. In essence it can be safely said that out of the price paid by the end-consumer approximately 49.75 per cent goes towards incentives/commisisons mostly to the IBOs in the upline or top level and the inherent costs incurred by Amway in awarding Founder's Achievement award and Founder's Distinguished Service awards. Moreover, the expenses of paid-trips to Peter Island also included in it. Now it is irrefutably and conclusively proved that more than 50 per cent of the cost paid by the end-consumer for Amway products is spent to enrich the toplevel IBOs besides Amway. To be precise most of the expenditure incurred by the end-consumer of Amway goes into the hands of the top few IBOs and Amway. This is totally contrary and inconsistent with the philosophy of saving additional costs.
Now let us list out the titles/names of intermediaries--Silver Producer, Gold Producer, Platinum, Ruby, Founder's Platinum, Founder's Ruby, Sapphire, Founder's Sapphire, Emerald, Founder's Emerald, Diamond, Founder's Diam ond, Executive Diamond, Founder's Executive Diamond, Double Diamond, Founder's Double Diamond, Triple Diamond, Founder's Triple Diamond, Crown Diamond, Founder's Crown, Crown Amabssador, Founder's Crown Amabassador. In all there are 22 intermediaries who line thier pockets with the price paid by the end-consumer.
More in the coming episode.